Foreigner's Finances

Bad money situations do not appear out of mid air. Poor education, bad luck, or lazy habits are just a few of the many problems that can lead to a difficult money situation. But one thing is for certain: complicated and dire money situations are tough to navigate.

Massive debt can be incredibly constricting and cause a lot of stress in one’s life. It’s difficult to escape a poor money situation and, unfortunately, too often the bad habits continue because the individual avoids taking action due to the size of the problem.

What an individual who is suffering from debt needs is clarity.

With bills piling up and not enough money coming in, the situation can seem complex. It may seem like there is always someone who is demanding more money, yet, there is no money available. The credit cards help for a while, but even they have their limits. Deep down inside, the person may want to fix the problem, but they just can’t seem to get themselves in a place where they are able to tackle the situation.

This is where meditation comes in. Yes, Foreigner’s Finances is going to get new-agey for a minute.

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Corinne and I are officially the proud owners of this 1998 Nissan Cube! Purchasing our first car – and in Japan, of all places – was quite the learning experience, but we came out better consumers because of it.

The Why

The need for a car was created because Corinne was having troubles getting to work. With no car, she had been taking the train into the city and walking forty-five minutes to work four or five times a week. We’re located in a more rural area, but we have a local train line that goes into the major city that is a nine minute walk from our house.The problem is the train only comes once an hour and the last train is usually around 11 p.m. With the train only coming once an hour, she was commuting almost two hours everyday, when a drive to work would only take fifteen minutes.

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As some of you may know, the Federal Reserve recently banned overdraft fees for ATMs and debt card purchases. Starting in July 1, 2010, customers will have to choose to opt-in to overdraft protection or else they will be denied at the register if they attempt to purchase an item without enough money in their account. Banks will also be required to make the details of the overdraft fee protection available and clear to the consumer.

At first, this appears to be a big hooray for the consumer. But the more I thought about the move, the more I disagreed with its intended motives.

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Welcome to the November 9th, 2009 edition of the Carnival of Twenty Something Finances!

I’m especially excited for this carnival because it’s the innaugural blog carnival hosted at Foreigner’s Finances. I’m glad you decided to check out some great posts this week from a bunch of incredibly talented bloggers. On with the carnival!

My girlfriend has been cat crazy lately, insisting that we look into getting a cat for our apartment. I’m fending her off, but in the meantime here are some pictures of cats with money, intertwined with this week’s Twenty Something Finances posts. I’ve also posted links to the author’s Twitters, when available, so feel free to follow them over there as well.

Enjoy!

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After a month of sharing a phone, my girlfriend and I decided to be grown-ups and buy her a phone.

A lot of other ALTs (Assistant Language Teachers) in the area have the iPhone because of its low price in Japan where it’s not very popular. I originally passed on it in July, but we decided to go with it this time for the internet access, GPS for the car, and, let’s admit – cool factor

We brought along my seventy-five year Japanese friend who runs my English club for translation help. After two hours of negotiation and a weeks wait, she had the phone.

One of the most difficult things about finances in Japan is letting little details go. I wasn’t 100% sure on the exact pricing for the phone, but we went with it anyway. This is something that wouldn’t have flown in America, but working with a translator who speaks broken English tests your patience after a while.

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Here are some interesting posts I’ve enjoyed over the last week. Also, make sure to read about my upcoming interview series, the ESL Virtual Job Fair.

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This post originally ran in September as a guest post at Green Panda Treehouse.

Finding a cheap plane ticket for a vacation or trip abroad is always cause for celebration. However, excessive celebration can blind you from the fact that the plane ticket is just a sliver of the entire travel expense.

The actual travel portion of a trip – plane, bus, gas for the car, subway, etc. – is usually the most expensive aspect of traveling and the most deceiving for budgeting. It is the hidden costs of travel that can cause an exciting adventure to quickly turn into a financial nightmare.

I’ll show you a real life example of this and demonstrate how adding an extra 70% to your travel budget can cause those hidden travel expenses to be handled properly. Leaving home and seeing the world is a  great time in anyone’s life so plan ahead so you can stop worrying about money, and start enjoying your trip.

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I received a bass guitar as a Christmas present my freshman year of high school.

Without a driver’s license or a girlfriend, I locked myself in my room and taught myself to play along with Blink-182 songs. I absolutely loved the thing and eventually taught myself to play a real guitar after borrowing my uncle’s acoustic. Unfortunately, my senior year of high school he needed the guitar back, so I decided to purchase one for myself.

My friend and I were driving around one day and we stumbled upon a pawn shop a couple of towns over. Pawn shops are in every town, but it seems like no one ever visits them. They really lose out in the cheap good’s game to thrift stores and the Salvation Army.

We went into the shop, not expecting much, but as soon as we walked in I spotted a beautiful acoustic guitar sitting on the ledge behind the cashier. It was polished and sitting up on its very own stand. I expected the guitar to be way out of my price range, but I decided to ask anyway.

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Another ALT (assistant language teacher) and I were recently talking about post-college life. He’s been out of college for a little over a year, while I have just been out for five months.

I told him how I was really enjoying the freedom and doing what I wanted for the first time in my life. For 22 years I felt like I was doing what was expected of me, and was never doing what I truly wanted. That finally changed when I got on the plane to Japan in July.

I told my friend how as I was enjoying not having to go to the library to study for a test, or having to keep myself awake through morning classes, but I mostly enjoyed coming home at four or five in the afternoon and being completely done with work and obligations.

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Last week we explored the numbers behind credit card debt. This week we’re going to take a look at how compound interest works in your favor by giving you more money for free.

With the ups and downs of the economy over the last twelve months, it’s difficult for anyone to know what to do with your money. Invest in the market and ride the roller coaster, or keep it at home where you can see it and no company will steal it?

The historical returns of the market, mixed with inflation, shows that keeping your money under your pillow isn’t worth it and sometimes you need to take some risk. Inflation has averaged around 3% a year so your money is losing value everyday it sits in your wallet or in a safe at your house.

The power of compounding interest is something that cannot be ignored. At first, it sounds like another boring financial term like dividend or exchange-traded fund, but compounding interesting is your best friend, and when you see it in action it really changes your mind about keeping your money in a safe at home. Picture your money giving you free baby money as a thanks for putting it in a savings vehicle.

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